TRADITIONAL IRA DISTRIBUTION FLOWCHART Educational info: Email
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Spouse
Is the IRA owner living?
Yes
Is the IRA owner age 70.5?
Yes
Is the spouse the sole beneficiary?
No
No
Yes
RMDs not yet required
Who is the Beneficiary?
Trust
Charity
Does the trust qualify as a designated beneficiary? See PLRs 200228025 and 200235039.
Rollover Take RMD for year of death, if applicable, then go to step one treating survivor as new owner.
Calculate RMDs using Joint and Last Survivor Table
Yes
No
Calculate RMDs using Uniform Lifetime Table
Estate
Are there multiple beneficiaries?
Non-Spousal Individual Beneficiary
Yes No
Did IRA owner die before his required beginning date?
No
Inherited IRA - See “Inherited IRA - Spousal Beneficiary” chart on next page.
Yes
No
(See PLR 201208039 for in-kind distributions from estate)
Did spouse perform a spousal rollover?
Is the spouse more than 10 years younger than IRA owner?
Yes
Yes
Were separate accounts created by Dec. 31st of year following the year of IRA owner’s death? Yes
Possible life expectancy of each beneficiary* under Single Life Table if separate trust shares in existence on the date that a person dies and the BDF specifically names each separate share as beneficiary. See PLR 200537044
No
Five-Year Rule (or six years if IRA owner died after 2003 but before 2010 - see IRC Sec. 401(a)(9)(H)(ii)(II))
Life expectancy of oldest trust beneficiary based on Single Life Table*
No
RMDs based on remaining life expectancy of decedent as of death based on Single Life Table
Were separate accounts created by Dec. 31st of year following the year of IRA owner’s death? Yes
RMDs based on life expectancy of each beneficiary based on Single Life Table *
*Or the owner’s life expectancy if the owner is younger than the oldest trust beneficiary and the IRA owner died after his/her required beginning date.
No
No
RMDs based on life expectancy of beneficiary based on Single Life Table*
RMDs based on life expectancy of oldest beneficiary based on Single Life Table *
© 2012 Keebler Tax & Wealth Education All Rights Reserved. Last Updated: 03/09/12
For discussion purposes only. This chart does not represent tax, accounting, or legal advice and is intended to provide generic and general information about the laws applicable to retirement benefits. The individual taxpayer should rely on his or her own advisors. The author, his firm or anyone forwarding or reproducing this work have neither liability nor responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly by the information contained in this work. Pursuant to the rules of professional conduct set forth in Circular 230, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the IRS, and it cannot be used by any taxpayer for such purpose. No one, without our express prior written permission, may use or refer to anything in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.
Inherited IRA - Spousal Beneficiary Owner Dies Before RBD
Owner Dies After RBD
Spouse may defer required distributions until the year the owner would have reached age 70 ½. Thereafter, RMDs are calculated based upon spouse’s life expectancy by referencing her attained age for the year of distribution under the Single Life Table . For each succeeding year, this process is repeated. (RECALC’D) RMD for year of death must be taken based upon decedent’s life expectancy factor under the Uniform Lifetime Table. Thereafter, the applicable distribution period is the longer of: (1) the surviving spouse’s life expectancy based on the Single Life Table using the surviving spouse’s birthday for each distribution calendar year after the calendar year of the employee’s death up through the calendar year of the spouse’s death. For each succeeding year, this process is repeated. (RECALC’D); or (2) the life expectancy of the deceased spouse under the Single Life Table using the age of the deceased spouse as of his or her birthday in the year of death, whereby in subsequent years, this factor is reduced by one.
Non-Designated Beneficiary Death Before RBD
Entire balance must be distributed no later than December 31st of the fifth anniversary year of the decedent’s death. However, consider (if possible) the potential to cash out non-individual beneficiaries, or segregate interests. PLR required.
Death After RBD
RMD must be taken for year of decedent’s death based upon decedent’s age in year of death based on the Uniform Lifetime Table. For the first distribution year, determine factor be referencing the owner’s age in year of death and reduce by one. This factor is then reduced by one for each succeeding year.
UNIFORM LIFETIME TABLE Attained Age in year of distribution 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92
Applicable Divisor under Final Regulations 27.4 26.5 25.6 24.7 23.8 22.9 22.0 21.2 20.3 19.5 18.7 17.9 17.1 16.3 15.5 14.8 14.1 13.4 12.7 12.0 11.4 10.8 10.2
Attained Age in year of distribution 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 and older
Applicable Divisor under Final Regulations 9.6 9.1 8.6 8.1 7.6 7.1 6.7 6.3 5.9 5.5 5.2 4.9 4.5 4.2 3.9 3.7 3.4 3.1 2.9 2.6 2.4 2.1 1.9
Single Life Table Age 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Multiple 82.4 81.6 80.6 79.7 78.7 77.7 76.7 75.8 74.8 73.8 72.8 71.8 70.8 69.9 68.9 67.9 66.9 66.0 65.0 64.0 63.4 62.1 61.1 60.1 59.1 58.2 57.2 56.2 55.3 54.3 53.3 52.4 51.4 50.4 49.4 48.5 47.5
Age
Multiple
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73
46.5 45.6 44.6 43.6 42.7 41.7 40.7 39.8 38.8 37.9 37.0 36.0 35.1 34.2 33.3 32.3 31.4 30.5 29.6 28.7 27.9 27.0 26.1 25.2 24.4 23.5 22.7 21.8 21.0 20.2 19.4 18.6 17.8 17.0 16.3 15.5 14.8
Educational info: Email
[email protected] to be added to our newsletter or for information regarding licensing agreements, seminars and speeches. Visit www.keeblerandassociates.com for additional educational materials.
Age Multiple 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111
14.1 13.4 12.7 12.1 11.4 10.8 10.2 9.7 9.1 8.6 8.1 7.6 7.1 6.7 6.3 5.9 5.5 5.2 4.9 4.6 4.3 4.1 3.8 3.6 3.4 3.1 2.9 2.7 2.5 2.3 2.1 1.9 1.7 1.5 1.4 1.2 1.1 1.0
© 2012 Keebler Tax & Wealth Education
All Rights Reserved. Last Updated: 03/09/12
For discussion purposes only. This chart does not represent tax, accounting, or legal advice and is intended to provide generic and general information about the laws applicable to retirement benefits. The individual taxpayer should rely on his or her own advisors. The author, his firm or anyone forwarding or reproducing this work have neither liability nor responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly by the information contained in this work. Pursuant to the rules of professional conduct set forth in Circular 230, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the IRS, and it cannot be used by any taxpayer for such purpose. No one, without our express prior written permission, may use or refer to anything in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.
